BILL ANALYSIS �
AB 50
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Date of Hearing: May 7, 2013
ASSEMBLY COMMITTEE ON HEALTH
Richard Pan, Chair
AB 50 (Pan) - As Amended: May 1, 2013
SUBJECT : Health care coverage: Medi-Cal: eligibility:
enrollment.
SUMMARY : Enacts provisions relating to the federal Patient
Protection and Affordable Care Act (ACA) regarding presumptive
eligibility (PE) by hospitals, enrollment in Medi-Cal managed
care plans, and the collection of demographic data on the
standardized application for state health subsidy programs.
Contains an urgency clause to ensure that the provisions of this
bill go into immediate effect upon enactment. Specifically,
this bill :
1)Requires the Department of Health Care Services (DHCS) to
establish a process to implement an ACA provision that allows
hospitals to make a preliminary determination of a person's
eligibility for Medi-Cal.
2)Effective January 1, 2015, repeals a requirement that an
applicant for, or beneficiary of, Medi-Cal or Aid to Families
with Dependent Children programs attend an in-person
presentation regarding managed care or fee-for-service (FFS)
health care options.
3)Effective January 1, 2015, repeals the requirement for DHCS to
develop a program to provide information and assistance to
enable Medi-Cal beneficiaries to choose a Medi-Cal managed
care plan (MCP) to be used pursuant to 2) above.
4)Requires, effective January 1, 2015, the single, standardized
application for state health subsidy programs to include
questions, that are optional for the applicant, that relate to
demographic characteristics, including, but not limited to
race, ethnicity, primary language, disability status, sexual
orientation, and gender identity or expression.
EXISTING LAW :
1)Establishes, under state and federal law, the Medicaid program
(Medi-Cal in California) as a joint federal and state program
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offering a variety of health and long-term services to
low-income women and children, low-income residents of
long-term care facilities, and seniors and people with
disabilities (SPDs).
2)Authorizes DHCS to enter into contracts with MCPs to provide
services to Medi-Cal enrollees.
3)Requires most persons eligible for Medi-Cal to enroll in a MCP
and establishes a process for informing enrollees regarding
plan selection.
4)Provides pregnancy-related Medi-Cal services to women with a
family income below 200% of the federal poverty level (FPL),
defined as services required to assure the health of the
pregnant woman and the fetus. There is no share of cost and
no asset limits for this program.
5)Establishes the Access for Infants and Mothers program (AIM)
to provide prenatal care and labor and delivery coverage for
pregnant women with a family income between 200% and 300% of
the FPL, and for children less than two years of age who were
born of a pregnancy covered under AIM.
6) Provides under state and pre-ACA federal law that in
order to qualify for full-scope, no share of cost Medi-Cal
services, a pregnant woman must have family income below
100% of the FPL, have assets below the allowable level,
meet qualifying immigration status requirements, and must
either have another dependent child in the home or be in
the third trimester.
7) Allows qualified providers to grant immediate, temporary
Medi-Cal coverage (known as PE or presumptive enrollment),
for ambulatory prenatal care and prescription drugs for
conditions related to pregnancy for low-income, pregnant
patients, pending their formal Medi-Cal application.
8) Provides, effective January 1, 2014, under the ACA that
citizen and legal immigrant children in foster care are
eligible for full scope Medi-Cal benefits regardless of
income or assets and upon attaining age 18, remain eligible
for full-scope, no share of cost Medi-Cal with no income or
assets requirements as former foster care children until
age 21.
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9) Requires, under the ACA, each state, by January 1, 2014,
to establish an American Health Benefit Exchange (Exchange)
that makes qualified health plans (QHPs) available to
qualified individuals and qualified employers. If a state
does not establish an Exchange, the federal government is
required to administer their Exchange. The ACA establishes
requirements for the Exchange and for QHPs participating in
the Exchange and defines who is eligible to purchase
coverage in an Exchange.
10) Allows, under the ACA and effective January 1, 2014,
eligible individual taxpayers, whose household income is
between 100% and 400% FPL inclusive, an advanceable and
refundable premium tax credit based on the individual's
income for coverage under a QHP offered in an Exchange.
11) Effective January 1, 2014, requires an individual to
have the option to apply for state subsidy programs, which
include the state Medicaid program, the state Children's
Health Insurance Program (CHIP), enrollment in a QHP and a
Basic Health Plan, if there is one, by either in person,
mail, online, telephone, or other commonly available
electronic means.
12) Effective January 1, 2014, requires development of a
single, accessible standardized application for the state
subsidy programs to be used by all eligibility entities and
establishes a process for developing and testing the
application.
13) Creates the California Health Benefit Exchange
(California Exchange), known as Covered California, as an
independent state entity governed by a five-member Board of
Directors, to be a marketplace for Californians to purchase
affordable, quality health care coverage, claim available
tax credits and cost-sharing subsidies and is one way to
meet the personal responsibility requirements of the ACA.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
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necessary for enactment of provisions needed to implement the
ACA, but that may need to be considered outside of the Special
Session in order to allow adequate time for implementation or
may need a delayed implementation date so as not to delay the
provisions and systems requirements that must be operative as
early as October 2013. The author points out in that former
category is the ACA provision that authorizes states to allow
hospitals to make a determination of PE, is therefore included
in this bill and is not currently included in AB 1 X1 (John A.
P�rez) and SB 1 X1 (Ed Hernandez and Steinberg). The author
explains that the Centers for Medicare and Medicaid Services
(CMS) issued draft preliminary regulations in January 2013 to
implement this section of the ACA, but they are not yet final.
In the latter category, the author points to the repeal of
provisions that applied when families were required to apply
for Medi-Cal in-person in a county social services offices.
These provisions require the applicant to attend an in-person
presentation regarding enrollment into managed care and will
be obsolete when the new plan choice mechanisms are available.
Finally, the author states this bill requires certain
demographic data be included as optional questions in the new
simplified application process that will be used to implement
the ACA, but not until January 1, 2105. The author states
that in order to meet the requirements of the ACA and for the
new system to be operational by October 1, 2013, a decision
was made to omit these items from the initial system design.
However, the author argues, this demographic information will
be crucial and therefore should begin to be collected in the
future. The author points out that it will be needed to
assess whether outreach and enrollment strategies to target
certain populations are needed. This data will also be
crucial in identifying and reducing health disparities.
2)BACKGROUND . Among other provisions, the ACA allows states, as
of January 2014, to expand their Medicaid program to provide
coverage for all childless adults between the ages of 19 and
65, with income up to 133% of the FPL (with a standard 5%
income disregard that makes the level effectively 138% of
FPL). For newly eligible individuals, the ACA provides full
100% federal funding from 2014 to 2016; 95% for 2017; 94% for
2018; 93% for 2019; and, 90% for 2020 and beyond. In
addition, the ACA requires that existing eligibility
categories for families and children be revised and simplified
so that income eligibility for all, with the exception of
SPDs, will be based on a Modified Adjusted Gross Income (MAGI)
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standard. Eligibility is to be determined without assets or
resource tests. Under the expansion, it is estimated that
between 1.2 and 1.6 million adults will become newly enrolled
in Medi-Cal in California.
The ACA includes strong provisions designed to ensure that state
enrollment policies and procedures and supporting technology
systems genuinely help individuals and families enroll and
stay covered, and also foster efficient administration. The
ACA also increases uniformity in income rules for all health
subsidy programs by streamlining applications and eligibility
rules, where possible. It does this, in part, by expanding
access to health insurance coverage through improvements to
the Medicaid and CHIP programs, the establishment of the
Exchanges, and the assurance of coordination between Medicaid,
CHIP, and Exchanges.
On June 28, 2012, the Supreme Court of the United States upheld
the individual mandate of the ACA, in National Federation of
Independent Business V. Sibelius (2012), 132 S. Ct. 2566.
However, the court found the mandatory nature of the Medicaid
expansion to be overly coercive. As a result, the court ruled
that states would have the option of implementing the
expansion of coverage to childless adults. The provisions
relating to simplification, streamlining, and the use of the
MAGI standard remained intact. On August 16, 2012, Governor
Brown submitted a letter to the President Pro Tempore of the
Senate and the Speaker of the Assembly informing them of his
plan to call a Special Session in the beginning of the next
legislative session to continue the work of implementing the
ACA. The Governor's letter refers to the actions that
California has taken to date and the benefits of the ACA that
have gone into effect. The letter also stated that many
important issues and questions could not be addressed or
answered without further guidance from the federal government
and additional analysis to understand the interrelationship of
the decision.
On January 24, 2013, Governor Brown issued a proclamation to
convene the Legislature in Extraordinary Session (also known
as Special Session) to consider and act upon legislation
necessary to implement the ACA in the areas of California's
private health insurance market, rules and regulations
governing the individual and small group market, California's
Medi-Cal program, changes necessary to implement federal law,
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and options that allow low-cost health coverage through
Covered California to be provided to individuals who have
income up to 200% of the FPL. AB 1 X1 and SB 1 X1 address the
second of the three areas identified in the Governor's
proclamation. AB 2 X1 (Pan) and SB 2 X1 (Ed Hernandez)
address the insurance market reforms, and SB 3 X1 (Ed
Hernandez) addresses the option of low-cost health coverage.
These bills will become effective 60 days after the
adjournment of the Special Session.
a) California Healthcare Eligibility, Enrollment, and
Retention System (CalHEERS ). The Exchange was established
in 2010 by AB 1602 (John A. P�rez), Chapter 655, Statutes
of 2010, and SB 900 (Alquist), Chapter 659, Statutes of
2010. Through the Exchange people with incomes up to 400%
FPL are eligible for advanced payment of premium tax
credits, subsidies, and cost sharing reductions, depending
on their income. The ACA requires states to have a single
streamlined application for Exchange subsidies, their
Medicaid programs, and their CHIP programs. Covered
California and DHCS are joint program sponsors of the
CalHEERS, which is the Information Technology system
running both the online application for the Exchange,
Medi-Cal, and Access for Infants and Mothers and also the
phone service center functions.
The ACA establishes a number of requirements regarding the
eligibility and enrollment process with the goal of
creating a consumer-friendly, streamlined, and coordinated
application process. CMS regulations require state
Medicaid and CHIP agencies to develop online single
streamlined applications, and build or modernize their
eligibility systems to implement MAGI rules and facilitate
coordination among insurance affordability programs, all of
which need to incorporate electronic data sources and
verification procedures. Federal regulations require that
individuals must not be required to provide additional
information or documentation unless information cannot be
obtained electronically or the information obtained
electronically is not reasonably compatible with
self-attested information. Federal law does allow states
the option of asking voluntary demographic questions.
Following extensive review and stakeholder comment and input,
Accenture was hired through a solicitation process for the
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design, development, and deployment of CalHEERS. The
portal will offer eligibility determinations for both
Medi-Cal and federally subsidized coverage through the
Exchange. It will allow enrollment through multiple access
points including mail, phone, and in-person applications.
It is guided by a "no wrong door" policy that is intended
to ensure the maximum number of Californians obtain
coverage appropriate to their needs. Eligibility and
enrollment functions will be released in September of 2013
in order to begin enrollment by October 2013, effective
January 1, 2014. The CalHEERS business functions include
interfacing with the Medi-Cal eligibility data system. It
will also have the capacity to be a secure interface with
federal and state databases in order to obtain and verify
information necessary to determine eligibility. With
regard to individuals who are eligible for Covered
California, it will allow those eligible for subsidies to
compare and select a QHP. According to an April 8, 2013,
CalHEERS Project and Usability Update, the project has
prioritized features to maximize enrollment, with
administrative and late-breaking capabilities scheduled for
later. Among those capabilities deferred is the ability of
a person who is deemed eligible for Medi-Cal to make a plan
choice. This bill repeals the existing Medi-Cal health
care options program in 2015, by which time the capability
will be operative.
b) FEDERAL REGULATIONS . CMS issued one of multiple sets of
proposed regulations governing Exchanges and the Medicaid
program on January 22, 2013, and requested comments be
submitted by February 13, 2013. These proposed regulations
cover, among other provisions, PE determined by hospitals.
The regulations provide that the states must provide
Medicaid during a PE period to individuals determined to be
eligible by a qualified hospital, on the basis of
preliminary information. The regulations further provide
that states may place other limitations on the services and
time period applicable to PE for children, pregnant women,
parents and caretaker relatives, and other eligible adult
services, such as breast and cervical cancer services. The
regulations also allow states to establish standards for
qualifying hospitals and require states to take action to
disqualify hospitals if the hospital is not meeting the
standards or is not capable of making PE determinations in
accordance with applicable state policies and procedures.
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3)MEDI-CAL MANAGED CARE . Currently Medi-Cal Managed Care (MCMC)
serves about 5.2 million enrollees in 30 counties, or about
69% of the total Medi-Cal population. There are three models
of MCPs. The oldest model is the County Operated Health System
(COHS). COHS plans serve about one million enrollees through
six health plans in 14 counties: Marin, Mendocino, Merced,
Monterey, Napa, Orange, San Mateo, San Luis Obispo, Santa
Barbara, Santa Cruz, Solano, Sonoma, Ventura, and Yolo. In
the COHS model, DHCS contracts with a health plan created by
the County Board of Supervisors and all Medi-Cal enrollees are
in the same health plan. The second model is the Two-Plan
model in which there is a "Local Initiative" and a "commercial
plan." DHCS contracts with both plans. The Two-Plan model
serves about 3.6 million beneficiaries in Alameda, Contra
Costa, Fresno, Kern, Kings, Los Angeles, Madera, Riverside,
San Bernardino, San Francisco, San Joaquin, Santa Clara,
Stanislaus, and Tulare. Thirdly, two counties employ the
Geographic Managed Care (GMC) model: Sacramento and San Diego.
DHCS contracts with several commercial plans in those
counties and there are about 600,000 enrollees.
Currently, Medi-Cal enrollees are sent a form to choose a plan
after they become eligible or if they have been converted from
a FFS category to a mandatory enrollment category. If a
Medi-Cal eligible person is required to enroll in MCMC and
does not choose a plan, they are assigned by default according
to a formula developed by DHCS. If the enrollee is converting
from FFS, before applying the formula, DHCS attempts to link
the enrollee with the plan that includes the existing primary
care provider in its network. Traditionally between 30% and
40% make a plan choice. In June 2011, DHCS began a year-long
process of mandatory enrollment of all SPDs in the Two-Plan
and GMC counties. Prior to that, the mandatory population was
primarily pregnant women, families, and children. Based on
data from the SPD enrollment, approximately 40% choose a plan;
approximately 14% were by default enrolled to a plan that had
a relationship with their identified primary care provider;
19% were by default enrolled using the algorithm because the
provider was linked to both plans; and, 27% were by default
enrolled because there was either no link or no data.
4)SUPPORT . The Western Center on Law & Poverty (WCLP) supports
this bill because it helps bring California's Medi-Cal
eligibility system into the 21st Century in many important
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ways. WCLP states that the provisions allowing hospitals to
conduct PE makes sense because hospitals will be able to help
uninsured consumers enroll in coverage when they receive
services in the hospital but do not have health coverage, and
that this will help provide a payer source for the hospital
and get enrollees the coverage for which they are eligible.
WCLP also supports the provisions that repeal the existing
outdated method for plan choice in Medi-Cal because CalHEERS
will provide an online portal for Medi-Cal, and the Exchange.
Finally, WCLP supports the provisions of this bill which
include voluntary demographic questions on the health care
coverage application because collecting race, ethnicity,
sexual orientation, language, and gender identity data is
important for tracking health disparities.
Health Access California supports this bill stating that
streamlining and simplifying enrollment and reenrollment into
health insurance is critical to ensuring access to the primary
and preventive care necessary to keep Californians healthy and
in order to realize long term savings in the health care
system. The California Pan-Ethnic Health Network states that
access to vital health care services will help to decrease
health disparities. The American Federation of State, County
and Municipal Employees supports this bill and writes that
these provisions will make it easier for the average
Californian who is applying for Medi-Cal or who is already
enrolled in the Medi-Cal program.
5)RELATED LEGISLATION .
a) AB 2 X1 and SB 2 X1 enact substantially similar
provisions in each bill to implement the ACA insurance
provisions related to health insurance regulated under the
Insurance Code and the Health and Safety Code,
respectively. Both bills are tied together so that they
both have to be enacted.
b) AB 1 X1 and SB 1 X1 implement various provisions of the
ACA regarding Medi-Cal eligibility and program
simplification including the use of MAGI and expansion of
eligibility in the Medi-Cal program.
c) SB 3 X1 requires Covered California to establish a
"bridge" plan product by contracting with MCMC plans for
individuals losing Medi-Cal coverage (for example, because
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of an increase in income), the parents of Medi-Cal
children, and individuals with incomes below 200% FPL.
d) SB 18 (Ed Hernandez) requests the California Health
Benefits Review Program (CHBRP) assess, in addition to the
health, medical, and financial impacts, the impact that
health coverage mandates will have on essential health
benefits (EHB), as specified, and the Covered California.
e) SB 28 (Ed Hernandez and Steinberg) implements various
provisions of the ACA regarding Medi-Cal eligibility and
program simplification including the use of the MAGI and
expansion of eligibility in the Medi-Cal program.
6)PREVIOUS LEGISLATION . AB 1296 (Bonilla), Chapter 641,
Statutes of 2011, the Health Care Eligibility, Enrollment, and
Retention Act, requires the California Health and Human
Services Agency, in consultation with other state departments
and stakeholders, to undertake a planning process to develop
plans and procedures regarding these provisions relating to
enrollment in state health programs and federal law. AB 1296
also requires that an individual have the option to apply for
state health programs through a variety of means.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, county and Municipal Employees,
AFL-CIO
California Optometric Association
California Pan-Ethnic Health Network
California Communities United Institute
Health Access California
Western Center on Law & Poverty
Opposition
None on file.
Analysis Prepared by : Marjorie Swartz / HEALTH / (916)
319-2097
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